Live$treaming: Amazon Buying Twitch For $970 Million

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Hey gang! Remember those rumours that Google planned to buy Twitch for a cool billion dollars? That’s not happening. The livestreaming service has been up for sale, though. Amazon announced yesterday that, all things going well, they’ll buy Twitch for $970 million in cash money. Being owned by Amazon is good for us users, Twitch say, because they’ll have the support to do new stuff faster.

The buyout would help explain Twitch’s unpleasant changes this month. It’s wiped huge archives of old video and started muting copyrighted audio in saved videos, cutting costs and getting legal ducks in a line. Investors tend to care more about that sort of thing than users do.

The deal isn’t quite settled yet, but the pair expect to sign, stamp, and seal everything later this year. The cascade of press releases and announcements also brings some new numbers on quite how popular Twitch is. “In July, more than 55 million unique visitors viewed more than 15 billion minutes of content on Twitch produced by more than 1 million broadcasters,” Twitch claim. Gosh.

We chose Amazon because they believe in our community, they share our values and long-term vision, and they want to help us get there faster. We’re keeping most everything the same: our office, our employees, our brand, and most importantly our independence. But with Amazon’s support we’ll have the resources to bring you an even better Twitch.

What happened to the Google rumours? The owner of YouTube buying this other big online video and streaming platform could have run afoul of antitrust laws and Google weren’t happy risking it, say a Forbes chap’s unnamed sources. Believe that if you will.

You know how you hear stories of the 10th employee of Google/Facebook making millions(or billions) of dollars when the company goes public? That’s because they were paid in PRIVATE shares of the company when they were hired or were paid as part of a bonus. The shareholders the OP is referring are typically investors – people that have generally poured a few million into the company to help it start up and in return the investors hope to double/triple the investment via buyout or going public. The investors usually have a fairly strong hand in how it’s going to play out in the end.

Well, let me show you the ingredients to Amazon’s master plan:
1) a video service, that competes with Netflix – Amazon Instant
2) The Amazon Kindle gaming/video streaming device device
3) A proprietary ecosystem – the Amazon appstore/video store, etc
4) Amazon game studios, which they now have now they’ve bought Double Helix
5) The world’s largest user video streaming service – Twitch, or whatever Amazon rebrands it as.

All tied into Amazon’s storefront and app recommendation engine. All together it leads to a massive, consumer based store, using a whole lot of data to sell you shit. It’s a massive monopoly on video entertainment, in a way. Play Amazon games, watch Amazon videos, watch OTHER people playing games, listen to commentary. All tied in.

Amazon understands the power of user generated content. They have the swarm rate their products, recommend based on their past sales and searches your searches. That is some mighty algorithm know-how and user generated content NEEDS new filter systems and search algorithms to work.

You heard of the Youtube scandals where Lets Players get paid under the counter for reviews? How about we bring this system out of the gutter into the honest business world and combine app-shop, content creators and commercials into one big plattform.

Watch out Steam, you are only a shop with a workshop and some screenshot-sharing and a chat function – can you compete with a software powerhouse that combines easy-access content streaming with a shop and algorithm voodoo?

Amazon’s digital downloads are essentially a Steam proxy anyway (or Origin/UPlay for EA/Ubisoft games), much the same as Green Man Gaming, Gamer’s Gate etc are. It does make you wonder though whether they are eyeing up a separate service of their own where they can make more than pennies on the dollar for every game they sell.
Either way they are certainly going for increased visibility for their digital games sales with the Twitch acquisition, among the other possibilities that have been discussed above.

A codification of standards must happen, be it copyright, be it advertisement. I trust the company with the big bank account on doing this swiftly and thoroughly for one simple reason: The competition always sues the cashcows not the flimsy startups.
It is not moral highground I imply, it is the inevitable rules and laws of the big business world.

“It’s wiped huge archives of old video and started muting copyrighted audio in saved videos, cutting costs and getting legal ducks in a line. Investors tend to care more about that sort of thing than users do.”

No wonder Amazon’s paying $30 million less than Google would have. They’re only buying half of Twitch, with the other half being thrown away.

I suspect that rumours sprang up that someone was looking to buy Twitch, and people just assumed it was Google because that seems to be the way of it. But by all means let’s have rumours about why Google didn’t buy it like they were rumoured to be going to be.

Acquisition like this aren’t about buying the software/service/technology – they’re about acquiring the userbase, maybe the smarter people and any patents they might have lying around.

Google didn’t need the userbase because they already have most of them on Youtube anyway (they’d have more of them if they’d not done the stupid mandatory G+ thing with it)

Amazon are apex predators who believe they can control entire markets but their last few forays haven’t been so successful (the Fire Phone is a bit of a comedy item in particular but their whole foray into Android SORRY FireOS hasn’t really been that great I suspect)

Why they want a large gamer userbase is curious tho – if I were to bet money I’d suggest they might be taking aim at Steam – but they have a LOT of work to do to get there.

They’ve launched a digital sales service for games in the last 12 months. At the moment it’s only Steam/Origin/Uplay keys but they are clearly trying to grow their service. I guess this does tie in to that, they will undoubtedly have links to their storepages visible throughout Twitch, the same way they have Amazon Prime links on individual IMDB pages.

The thing I like most about amazon, is that when i’ve bought things which are broken / crap or eventually brake, i’ve been able to get a full refund or replacement every time with no questions asked. I’m not sure they are going to be able to apply this principle to VoDs unless they figure out how to give me minutes of my life back.

I guess you haven’t had the mandatory Skype upgrade yet, then, that reskins it to look like Windows 8 regardless of platform (which has been the case since v6, admittedly), wants you to sign in with a Microsoft Account (although legacy Skype accounts are still an option), and wants to set your search engine and homepage to Bing and MSN when upgrading.

Oh, and the new (mandatory) Linux version is crashtacular. Insert your own tinfoil-hat theories or accusations of incompetence to taste here.

It’ll be interesting to see how Amazon treats this acquisition, which will be the key clue to its long-term strategy. Some purchases get integrated tightly, while others (e.g. Zappos) remain spinning out there in autonomous orbit, with little overlap and even minimal data integration (from a user perspective).

It’s possible Amazon doesn’t even know yet – or rather, hasn’t made a long-term strategic commitment yet. The company’s internal culture is entrepreneurial, experimental, and data-driven, and the Twitch pickup offers many opportunities to exercise those values in different directions before identifying the overarching play.

They could get along without a steam-alike and keep a tap on the user generated wonders of Twitch but a billion is a big number.

I guess they will push the Twitch integration into gameclients in the industrie as deep and wide as they can and then have either a lean or a steam-alike client as a tie in to push people to their own shop and generate sales.

They will seek to implement a way that allows you to buy a software depicted in the video on your screen with as few clicks as possible. Because impulse buys are the easiest buys to lose and they do not want to lose sales to the competition either.

Yeah, this does make me worry for the content generators of Twitch, given how Amazon treats its authors, publishers, and general employees.

And one company which has yet to turn a profit buying another company that probably isn’t doing much profit-wise does seem to smack of over-valuation. But then again, I am a know hater, so perhaps more optimism is called for in this case.

At this point I’m not sure why CEO’s / PR people still bother with claiming that they will of course keep their independence when their company gets bought. I mean, are there really people who believe that Amazon just gave the previous owners a bunch of cash and then told the CEO “alright, just keep doing what you were doing but don’t forget to send us your quarterly reports!”.

I feel offended every time this happens. It makes me want to stop using the related products / services, no matter what I think of the new parent company, because the people who write these statements are either 1) deluded or 2) lying knowingly.

I read this morning an article (behind paywall, sorry) arguing that one possible motivation was Amazon’s desire to face Valve’s monopoly on PC gaming sales (which directly impacts Amazon as an ecommerce business). That made sense to me.

Amazon focuses on media to drive revenue (see books as one of their best money making fronts) and have made acquisitions of products that further enhance their ability to monetize such media (think of Goodreads, Audible, Kindle…). So “entering” the game scenario through Twitch might make sense.